The business behind the show

'Expendables' sequel to be China co-production

Last year's Sylvester Stallone action movie "The Expendables" was the 10th-highest-grossing release of the year in China, collecting $32.1 million in one of the world's fastest-growing film markets.

But Nu Image, which financed the movie, collected less than $1 million from the country. The reason: Unable to secure one of the Chinese government's approximately 20 revenue-sharing slots per year for imported pictures, the independent studio had to sell rights to a local distributor for a flat fee. The valuable revenue-sharing slots are primarily taken by major studios like Warner Bros. and Sony Pictures.

Seeking to leave less money on the table with its planned "Expendables" sequel, Nu Image is now in talks to partner with a Chinese distributor and shoot some scenes in that country. The studio believes it could generate about $8 million from the local company with which it works. Co-producing the movie with a Chinese partner would also guarantee the "Expendables" follow-up a release in China without having to navigate the byzantine system for exporting movies to the country.

The performance of the first film “whet the appetite for the second film as a co-production,” said Trevor Short, Nu Image’s chief financial officer. But to ensure that the movie will be co-financed by a Chinese partner, Nu Image not only has to add scenes in the sequel’s screenplay that can be shot in China, but also have the project approved by government censors. “It can’t be detrimental to China,” Short said of what the communist authorities look for.

The company tried to attract a Chinese co-production deal for its recent remake “Conan the Barbarian,” but were turned down. “They seem to have a problem with mysticism and fantasy,” Short said.

For much more on the innovative steps that independent studios like Nu Image are taking to capitalize on the booming Chinese movie market, see the story in today's Times.